Belle Auto Detailing reported the following results for the past week: Actual number of cars detailed 250 Actual direct labor hours used 625 Actual total direct labor cost $6,500 Budgeted number of cars to be detailed 300 Standard direct labor cost per hour $10 Standard direct labor per car 1.5 What is Belle's direct labor rate variance? $250 unfavorable $150 unfavorable $150 favorable $250 favorable

The correct answer is A.

Explanation:

Giving the following information:

Actual number of cars detailed 250

Actual direct labor hours used 625

Actual total direct labor cost $6,500

Budgeted number of cars to be detailed 300

Standard direct labor cost per hour $10

Standard direct labor per car 1.5

Direct labor rate variance = (Standard Rate - Actual Rate) * Actual Quantity

Direct labor rate variance = (10 - 10.4) * 625 = $250 unfavorable